Helping You Keep Your Home

California mayors and city managers are being encouraged to educate their communities about Keep Your Home California, a free mortgage-assistance program that has helped more than 58,000 homeowners.

Keep Your Home California— a state-managed program — has mailed several hundred letters to mayors and city managers in the state, from Eureka in Northern California to San Diego in Southern California. The letter campaign delivers a simple but very significant message to city leaders and hopefully passed along to their residents: financially strapped homeowners could get as much as $100,000 from Keep Your Home California.

Bakersfield is being hit hard by low crude oil prices, with Kern County’s jobless rate at 9%, almost twice the statewide average. Many of the affected employees who own homes could apply for Keep Your Home California, a free mortgage-assistance program.

Keep Your Home California has issued almost $1.2 billion in funding since the program started in February 2011. At the current pace of funding, the program will end in early 2017 or possibly even late 2016, about a year earlier than the federal deadline.

So, homeowners should apply soon for Keep Your Home California, since the application-to-approval process can take from 30 days to more than 90 days, depending on the program for which they ae applying and how fast homeowners complete the necessary paperwork.

The federally funded program has helped Californians who are behind on their mortgage payments, those dealing with unaffordable or underwater mortgages (and, in many cases, both) or even out-of-work homeowners. The program has also helped cities by curbing foreclosures, reducing abandoned homes and protecting property values, a critical revenue source for local government.

Despite a better economy, many Californians could benefit from the program. For example, about one of every 11 homeowners with a mortgage is underwater and 5% are behind on their mortgage payments. And nearly 1.2 million residents are unemployed, including many who own homes.

About 20% of Fresno-area homeowners are dealing with an underwater mortgage. Keep Your Home California recently mailed letters to city officials, including those in Fresno, encouraging them to educate their residents about the free mortgage-assistance program, including a program for homeowners with unaffordable or underwater mortgages.

Keep Your Home California has five programs, including a pilot program for seniors with reverse mortgages, to help homeowners:

Principal Reduction Program: Homeowners who owe more than their home is worth and/or have an unaffordable payment can cut their outstanding principal balance by as much as $100,000 while saving hundreds of dollars every month. Many homeowners also often save hundreds of dollars every month in payments with the program.

Unemployment Mortgage Assistance Program: Out-of-work homeowners who have received jobless benefits from the state Employment Development Department in the previous 30 days can receive as much as $3,000 per month for up to 18 months for their mortgage payments.

Mortgage Reinstatement Assistance Program: Homeowners who are behind two months or more on their payments can qualify for as much as $54,000 to help them “catch up” on their past-due mortgage payments. Homeowners must have recovered from their financial hardship and be able to make their mortgage payments going forward in order to be eligible for the program.

Transition Assistance Program: Homeowners who have reached an agreement for a deed-in-lieu of foreclosure or short sale with their mortgage servicer could receive up to $5,000 in relocation assistance.

Reverse Mortgage Assistance Pilot Program: Homeowners 62 years or older who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration (FHA)-insured reverse mortgages can qualify for as much as $25,000 in assistance. The program reinstates past-due property-related expenses such as taxes and homeowner’s insurance, and provides up to 12 months of additional assistance to ensure homeowners get back on their feet.

Homeowners must meet program eligibility requirements, including having suffered a financial hardship—such as a job loss, cut in pay, a divorce, death or extraordinary medical expenses—and meet county-by-county income requirements. Severe negative equity, a loan-to-value ratio greater than 120%, is considered financial hardships under the Principal Reduction Program.

A homeowner’s mortgage servicer, the company that collects the monthly payment, must also participate in the program. More than 240 servicers, including Bank of America, Wells Fargo and Chase, are enrolled in Keep Your Home California.

If you would like more information about Keep Your Home California and the five programs, attend an upcoming event or call the counseling center at 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org (Spanish speakers should visit http://conservatucasacalifornia.org/). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Translators are available, so counseling sessions can be conducted in virtually any language.

Keep Your Home California

Keep Your Home California is a $2 billion federal program run by the state, focused on helping low and moderate income families avoid foreclosure, stay in their homes, and maintain an affordable mortgage payment for long-term homeownership.